The federal government has announced what they’re calling a “final extension” of student loan payment.
Millions of borrowers now have until January to restart their student loan payments.
On Wednesday, President Biden announced a sweeping effort to forgive up to $20,000 of federal student loan debt for Pell Grant recipients, and up to $10,000 for other qualifying borrowers.
The Education Data Initiative says that 21% of Michiganders owe between $20,000 and $40,000 dollars.
Abigail Gautreau lives in Grand Rapids. She's a history professor. She took out almost $50,000 of loans for her masters degree in history. Despite 14 years of payments, she says due to interest, she still owes $47,000.
"They're like a constant background source of stress. It's hard to know how much how stressful it was. I think I didn't appreciate it until they paused the payments and suddenly I wasn't having to, like, find this money every month to throw into basically a black hole of debt," she said.
David Gottesman graduated from the University of Michigan and has nearly $40,000 in debt. He now works in education publishing.
“A lot of people don't realize they'll be paying loans for ten plus years. It becomes something that, you know, you kind of have to put on the back burner and you stress about, but you can't think about day to day, otherwise you'll go crazy," he said.
Gottesman thinks the problem is systemic and college should be cheaper for everyone.
Tim Nowak agrees. He graduated from Western Michigan University in June. He lived in an apartment instead of a dorm during college and paid on the interests of his private loan while he was in school. He owes $30,000 in federal loans and $60,000 in private loans.
He moved to Chicago and says that most of his salary goes to loan payments and living expenses.
“The decision to cancel $10,000 in student loan debt and $20,000 for Pell Grant recipients will make a real difference for 1.4 million Michiganders that have student loans, putting money back in their pockets,” said Governor Gretchen Whitmer. “Nearly 700,000 Michiganders will have their debt cut in half or eliminated entirely, lifting a huge burden off their backs. People can use these savings to buy a home, start a business, get married, or start a family."
Caitlin Boon graduated from the University of Michigan in 2011 with $63,000 in debt. Despite making payments, she still owes $63,000.
Since graduating, she's gotten married, had two children, gotten a job with the state. She says these loans haven't stopped her from doing anything she wants to do.
"I do sometimes think about how we could have used the money differently," she said. "When payments resume, mine’ll be $400 a month, which is above what we budget for gas but below what we budget for groceries, daycare, or mortgage, so it’s not a huge expense for us. At the same time, that’s money that we could be putting somewhere else - like the 529 accounts we have for our kids."
